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2013 Q2 Global CFO Signals

An uneven recovery

There’s a recovery out there. Didn’t you get the memo?

Judging from the results of the latest Global CFO Signals report, which features surveys from 19 geographies, there is a bit of a disconnect in the outlooks of finance executives worldwide - both for their home countries and own companies. Still, despite continued uncertainty over regulation, taxes, and other economic factors, CFOs globally seem united in their push for growth.

  • Australia: Safe to go back into the water?
  • Austria: Uncertainty on the rise again
  • Belgium: Call for action
  • Bulgaria: Intensifying vigilance
  • Croatia: Caution on the verge
  • Czech Republic: All eyes on corporates
  • Estonia: Economic stability emerging
  • Hungary: Preparing for tough times
  • Ireland: Riding the tide of uncertainty
  • Latvia: Driven by people
  • Netherlands: Optimism inches forward
  • North America: An air of optimism
  • Romania: Business as usual
  • Serbia: In a sea of uncertainty
  • Slovakia: Pessimistic sentiments
  • Slovenia: Braced for contraction
  • Switzerland: Recovery continues
  • United Kingdom: Planning for growth
Q2 2013 Global CFO Signals report

Judging from the results of the latest Global CFO Signals, there is a bit of a disconnect in the outlooks of finance executives worldwide—both for their home countries and their own companies. While the positive views held by CFOs in North America and in several European countries have become increasingly solid, some others in Central Europe and particularly Australia are moving in the opposite direction. And those negative sentiments persist despite the fact that such factors as the euro crisis, the U.S. fiscal cliff, and slowing consumer demand are fading from the headlines.

First, the good news: In this issue of Global CFO Signals, which features surveys from 19 geographies (including inaugural surveys from Estonia, Latvia, and Lithuania); the strength of CFOs’ optimism in certain regions clearly stands out. In the UK, for example, business optimism has risen for the fourth consecutive quarter and is well above average. Buoyed by the strength of their home economies, nearly 60% of North American CFOs express rising optimism, and just 13% express rising pessimism (the lowest proportion in the history of the survey). And even in Ireland, which slipped into recession in Q2, a net 36% of CFOs are optimistic about their companies’ prospects, up 3% from last quarter.

That optimism is also translating into expansionary tactics and investment in some countries. In Switzerland, for example, almost one-third of CFOs expect to make capital expenditures, which is twice as many as a year ago. In the Netherlands, more than half (57%) of CFOs expect M&A activity to rise, and risk appetite among UK CFOs is at its highest level since the survey began.

Trouble spots persist, however. In Belgium, where 88% of CFOs do not believe their home economies will recover this year, CFOs are particularly concerned about the negative impact of government policies on their businesses. In Central Europe, stagflation is expected in countries such as Bulgaria, the Czech Republic, and Hungary. And perhaps most troubling, CFO optimism took a nosedive in Australia, driven by fears of a slowdown in China and uncertainty over federal-government policy there.

Still, despite continued uncertainty over regulation, taxes, and other economic factors, CFOs globally seem united in their push for growth. More than half of Australia’s CFOs, for example, showed renewed interest in M&A despite their dour outlooks, and almost half of Serbian CFOs are optimistic about their financial prospects even though 10% are predicting recession. They, like some of their counterparts, might not like what they see in the economic forecast, but seem determined to ride the tide of uncertainty. 

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